Gold News

South African gold output 'to decline until 2014'

A new study released today (June 9th) has suggested that gold production in South Africa will continue to decline until at least 2014, Mining Weekly reports.

The country was once the world's largest producer of the yellow metal but slipped behind China in 2007 and is now third overall, having also been surpassed by the US.

It could only muster 220 tonnes of gold last year, a situation which was made worse by the impact of the power crisis suffered by state utility Eskom in January.

Now business research and consulting firm Frost & Sullivan has sounded a positive note for anyone with a Gold Investment by indicating that this trend is likely to continue.

Wonder Nyanjowa, a mining and metals analyst at the company, told the news provider: "The South African government's renewed focus on mine safety, declining ore grades, electricity shortages, skills shortages, increased operating-cost pressures and a difficult labour environment will result in further production cuts."

Such news is welcomed by those with an investment in the yellow metal as lower global supplies inevitably lead to a spike in demand and therefore higher Gold Prices.

A similarly positive, albeit broader outline for gold was offered last week by a group of analysts at leading North American financial services provider BMO Capital Markets.

"Gold, copper and oil should continue to be supported by better economic conditions, poor supply growth prospects over the long term and their appeal as a hedge," they were quoted as saying by the Wall Street Journal.

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